Modelling the Link Between Management Practices and Financial Performance. Evidence from Small Construction Companies

Modelling the Link Between Management Practices and Financial Performance. Evidence from Small... This paper develops a structural model to investigate the direct and indirect effects of owner–manager and company characteristics and selected management practices on the financial performance of a sample of 218 small Belgian construction companies. The results show that the owner–manager and company characteristics (experience, education, financial knowledge, knowledge of cost accounting, company size and age) have no direct significant impact on financial performance. However, several significant paths have been found between the owner–manager and company characteristics and management practices. As far as the direct effects of the management practices are concerned we observe several significant paths from the management practices to financial performance. Our findings indicate that a model approach by including owner–manager and company characteristics and management practices in an intertwined way is necessary when exploring their effects on small business financial performance. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

Modelling the Link Between Management Practices and Financial Performance. Evidence from Small Construction Companies

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2005 by Springer
Subject
Business and Management; Management; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
D.O.I.
10.1007/s11187-005-4255-y
Publisher site
See Article on Publisher Site

Abstract

This paper develops a structural model to investigate the direct and indirect effects of owner–manager and company characteristics and selected management practices on the financial performance of a sample of 218 small Belgian construction companies. The results show that the owner–manager and company characteristics (experience, education, financial knowledge, knowledge of cost accounting, company size and age) have no direct significant impact on financial performance. However, several significant paths have been found between the owner–manager and company characteristics and management practices. As far as the direct effects of the management practices are concerned we observe several significant paths from the management practices to financial performance. Our findings indicate that a model approach by including owner–manager and company characteristics and management practices in an intertwined way is necessary when exploring their effects on small business financial performance.

Journal

Small Business EconomicsSpringer Journals

Published: Mar 22, 2005

References

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